Chinese Banks Face Safe Assets Issue In SME Loan Push: Herald

Commercial banks in China are finding it hard to meet the requirement of boosting lending to SMEs, due to a lack of safe assets as SMEs’ anti-risk capabilities are weak amid the economic downturn, the 21st Century Business Herald reported citing credit managers. China’s top banking regulator asked the big five state-owned banks to achieve an annual growth of 30% in new inclusive loans, while inclusive loans increased by 24.6% y/y as of October, 9.7 percentage points higher than the average growth of other loans, the newspaper said. Such “asset shortage” even affects the financial market with the rate of 10-year China Government Bond approaching a new low and the discounting rate of bank bills once falling to close to zero, the newspaper said.